Bill changes landscape for state distilleries

By Lou Fancher, Correspondent San Jose Mercury NewsThe partial collapse of a 79-year-old, Prohibition-era law restricting California distillers from offering paid tastings holds promise of a brighter, more equitable spirit-consuming future for Californians. Assemblymember Nancy Skinner, D-Oakland, and the California Artisanal Distillers Guild (CADG) chose Alameda's St. George Spirits on Nov. 19 to unveil AB 933, signed into law on Sept. 26 by Gov. Jerry Brown. "We are here to celebrate that California artisan and craft distillers will very soon be allowed to offer paid tastings. We've been able to modify the laws so that they will no longer be frozen under Prohibition laws," Skinner said. Beginning on Jan. 1, distillers will find themselves on nearly level ground with breweries and wineries. For decades, craft distillers have adhered to Byzantine "fair trade" laws originally tiered to "balance" 1930s powerful liquor distributors, retailers and producers. Over the years, the wine and beer lobbyists performed legislative workarounds, allowing vintners and brewers to charge for tastings and sell their products without a middle man, but California's spirits producers lagged behind. Even the special, type 4 licenses allowing them to offer samples did so only without charge. Fees for tours or for commemorative glasses were the only ways small distillers could reach out to their customers without drowning their own businesses in the costs. AB 933 will allow distillers to offer paid tastings: up to six, one-fourth-of-one-ounce tastes per individual per day. "Our industry has not been able to serve the public," Skinner said. "They've been able to do it voluntarily, but these are businesses. Promoting (them) supports our state's agriculture, makes our economy strong. Many use 100 percent California produce in their distilleries." California's microdistillery movement began when German-born Jörg Rupf founded the St. George Spirits eau-de-vie distillery in 1982. Artisanal spirits caught on, not just in California, but across the country. Industry estimates count close to 400 licensed producers in the United States. While most of the country updated their distribution laws long ago, California and a few other states remained in the dark -- and dry -- ages. Arthur Hartunian, owner of Napa Valley Distillery and CADG president, used his moment in the spotlight to applaud Skinner's and Assemblymember Rob Bonta's efforts on behalf of the 22 CADG distillers and to announce a change. "AB933 is truly a step in the right direction. What we've accomplished is remarkable. I invite everyone to get a taste of California," he said. "As CADG enters a new chapter, I think it's time for a new president. We need a leader with a voice that resonates. Someone who knows the craft of spirits making. Effective immediately, Lance Winters will be your new president." Winters, St. George Spirits master distiller and CADG vice president until Hartunian's announcement, said the bill's passage points out the industry's tenacity and legislative recognition of the vital role distillers play in the Bay Area economy. Toasting with glasses of St. George's "Pear eau-de-vie," the distiller's flagship, unaged brandy, Winters said, "This is what AB 933 is all about." In private comments after the public address, Winters said 30 pounds of local pears go into each bottle of the brandy. This year, his distillery will use 150,000 of California sugar cane, rye from Shasta, corn from Davis, barely from Chico, and more. "So many California things can be drawn together here," he said. Elated by the CADG's success after just one year -- and appreciative of Skinner's unflagging support -- Winters is angling for more. "The next thing that needs to be changed is the ability to sell product direct," he said, describing the 120-mile, round trip his bottles must take from their origin to a distributor to the third-party retailer (located back at the distillery). "I have good distribution. But let's say someone starts with a unique product, but the distributor isn't sure about it. You've created innovation, but you're trapped; you can't sell it, or force someone else to sell it, or start your own distribution." Skinner said the bill's success came largely because her colleagues saw the human face of California distillers who came to Sacramento and recognized the impact they have on jobs and the local economy. "It makes sense we celebrate them and give them the level playing field our wineries have," Skinner said. "We're still behind other states that can sell their products on-site, but it's a brilliant, growing industry and Californians deserve to know about it."

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